In the race for cloud services, Baidu counts on AI for a competitive edge
Baidu, the operator of China’s biggest search engine, plans to leverage its know-how in artificial intelligence to gain a competitive edge in the race to develop cloud services, according to its president.
Declaring that the cloud business has moved away from competing on price for basic computing and storage services, the company known as China’s version of Google is counting on its machine learning, AI and big data analysis capabilities to help “businesses address real problems”, said Baidu president Zhang Yanqin.
“We don’t aim for the biggest, but we aim to provide corporate users with the most intelligent cloud,” Zhang said in an interview with the South China Morning Post in Shenzhen.
The remarks come as the Beijing-based search giant remains the smallest player among China’s tech trilogy known as BAT – Baidu, Alibaba and Tencent. Its cloud revenue is expected to reach 4 billion yuan (US$624 billion) by 2020, roughly 10 per cent of Alibaba Group’s same forecast and 14 per cent of Tencent’s, according to a research note by Deutsche Bank. Alibaba is the parent company of the Post.
“For cloud services, we don’t focus too much on revenue, but on the products and services themselves,” said the president. “The market potential will be multiple times bigger than the IT industry.”
Declining to comment on his competitors, Zhang said Baidu has no interest in taking part in a “price war” but hopes to provide value through AI and big data in the second phase of the cloud implementation.
“We want to have core advantages when moving into industry-specific solutions,” he said. Baidu cloud currently focuses on finance, media, internet of things and marketing as its four major applications.
The company has over 100,000 corporate users, most of which are paid, according to Zhang. “They are willing to pay in exchange for more secure and sustainable cloud services,” he said, adding that while big companies prefer tailor-made services, small and medium-sized firms look for platform technology capabilities.
Zhang explained why he thinks the company and cloud services are a natural fit: “Baidu has grown on cloud since day one. Its three most-widely used applications across the country – search engine, video streaming and online storage – are all backed by cloud, and require some of the most complicated technologies.”
Zhang did not want to comment on the recent management reshuffles at Baidu and its high executive turnover. The company has lost more than nine high-ranking managers over the past year or so, with the shock resignation of chief operating officer Lu Qi last month the latest. In March the two general managers in charge of Baidu Tieba and the company’s mapping services also left, and last year Andrew Ng, Baidu’s then chief scientist and an acclaimed AI expert, resigned to join an autonomous driving venture.
Zhang stressed that AI remains at Baidu’s core. “We have the DuerOS [operating system] for smart home and Apollo for smart car solutions, while AI will empower the business end through cloud and internet of things,” he said.
The company employs about 4,500 AI researchers, according to Yin Shiming, vice-president and general manager of Baidu Cloud Computing.
Before joining Baidu in 2014, Zhang served as Microsoft's corporate vice-president and chairman of Microsoft's Asia R&D group, leading overall research and development efforts in Asia-Pacific, the company's largest R&D establishment outside the US. He joined Microsoft in 1999 as one of the key founders of Microsoft Research Asia.